Pennsylvania Accountant Sentenced to 40 Months in Prison for Conspiring with Members of Organized Crime Family in Mortgage Fraud Scheme

Pennsylvania Accountant Sentenced to 40 Months in Prison for Conspiring with Members of Organized Crime Family in Mortgage Fraud Scheme

CAMDEN, NJ—A Pennsylvania accountant was sentenced today to 40 months in prison for conspiring to defraud FirstPlus Financial Group Inc. (FirstPlus), a Texas-based financial services company, which had been targeted for extortionate takeover and looting by a group led by Lucchese organized crime family member Nicodemo S. Scarfo.

New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division made the announcement.

Howard Drossner, 53, of Ambler, Pennsylvania, previously pleaded guilty before U.S. District Judge Robert B. Kugler to a superseding information charging him with conspiracy to commit wire fraud. Judge Kugler imposed the sentence today in Camden federal court.

According to court documents and evidence introduced at a related trial:

Scarfo is a made member of the Lucchese La Cosa Nostra (LCN) organized crime family. In April 2007, Scarfo, Salvatore Pelullo, and others devised a scheme to take over FirstPlus. Scarfo and Pelullo used threats of economic harm to intimidate and remove the prior management and board of directors and replaced those officers with individuals beholden to Scarfo and Pelullo.

Drossner, a certified public accountant, joined the conspiracy in February 2008 when he helped Scarfo and Scarfo’s then-fiancée secure a $500,000 mortgage to purchase a house for $715,000 in Egg Harbor Township, New Jersey. At the direction of Pelullo, Drossner created false tax returns to help Scarfo’s fiancée qualify for a mortgage. Scarfo used money looted from FirstPlus for the $215,000 down payment on the house. The false tax returns, which exaggerated Scarfo’s fiancée’s income so that she could qualify for the mortgage without naming Scarfo, were used to secure the mortgage.

After the First Plus scheme was shut down by federal law enforcement in May 2008, Scarfo was unable to pay the mortgage and the house ultimately went into foreclosure. It was sold by the bank in 2010.

In addition to the prison term, Judge Kugler sentenced Drossner to three years of supervised release and fined him $125,000. Under the terms of his plea agreement, Drossner was required to notify the Pennsylvania State Board of Accountancy of his guilty plea and consent to the voluntary suspension of his CPA license.

Four other members of the conspiracy—Scarfo; Pelullo, an associate of the Lucchese and Philadelphia LCN families; William Maxwell, a Texas lawyer; and John Maxwell, who acted as the nominal CEO of FirstPlus after the takeover—were convicted of several offenses, including racketeering conspiracy, in July 2014 after a six-month trial. The indictment in which they were charged also named Nicodemo S. Scarfo’s father, Nicodemo D. Scarfo—the former boss of the Philadelphia LCN family—and Vittorio Amuso—the boss of the Lucchese family—as unindicted co-conspirators. Both are serving lengthy prison sentences.

Three other defendants charged in the indictment—John Parisi, manager of Scarfo’s shell company; Lisa Murray-Scarfo, Scarfo’s then-fiancée and a participant in the mortgage fraud conspiracy; and Cory Leshner, a participant in the looting of FirstPlus—have pleaded guilty and are awaiting sentencing. Todd Stark, also charged in the indictment, previously pleaded guilty and was sentenced for providing ammunition to Scarfo and Pelullo despite knowing that they were convicted felons.

U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of the FBI under the direction of Special Agent in Charge Aaron T. Ford in Newark; special agents of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region; and the ATF, under the direction of Special Agent in Charge George P. Belsky in Newark, for the investigation leading to today’s sentencing. They also thanked the FBI under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia for its assistance.

The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office’s Camden Office and Trial Attorney Adam L. Small of the Organized Crime and Gang Section in the Department of Justice’s Criminal Division in Washington.